Internal documents obtained by The Daily Wire show serious financial troubles at The Kennedy Center during the Biden administration. The center, known for its performances and cultural events, is facing significant debt and potential legal issues due to alleged mismanagement.
Richard Grenell, the current president of the Kennedy Center, informed the board that his predecessor, Debra Rutter, oversaw a budget that included $26 million in "phantom revenue." Grenell described this as "criminal" and stated that he plans to refer the matter to the U.S. attorney’s office for further investigation.
Rutter has denied these claims, arguing that her team prepared annual budgets that received board approval. However, the center’s Chief Financial Officer, Donna Arduin, pointed out in a letter that budgets and audits operate on different schedules. She emphasized that audits, which assess financial health, are released well after budgets are approved.
Arduin, who has a strong background in budget management, discovered that Rutter’s administration concealed $26 million in fictitious revenue from the board. She noted that the board believed they were approving a balanced budget, which was not the case. Additionally, under Rutter’s leadership, the center reportedly renamed a debt reserve fund to make it appear as if new funds were available, using donor contributions meant for loan repayment to cover deficits.
The Kennedy Center has been in the spotlight for its financial issues, with sources indicating that its programming has resulted in a staggering negative margin of $72 million. The center operates on an annual budget of $230 million, with part of its funding coming from Congress and the rest from donations. Under Rutter, the center raised $250 million and took out a $72 million loan to build The REACH, a new multipurpose space. Critics, including former President Donald Trump, have called this project a misallocation of funds, suggesting that the money should have been used to reduce debt instead.
Arduin criticized the previous leadership for creating a budget with an operating deficit of $100 million and an overall deficit of $26 million. She claims that the current administration has managed to balance the budget effectively. In March, Arduin warned staff that the center had no cash to pay its bills, prompting Grenell to announce plans for staff cuts and salary reductions among executives.
As the Kennedy Center grapples with these financial challenges, it remains to be seen how the new leadership will address the issues and restore the institution’s reputation.